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Arsoa Keio Group: Navigating the global beauty landscape with quality, innovation, and a holistic approach

Interview - January 30, 2024

From innovative skincare products to water purifiers, Arsoa Keio Group is pioneering new horizons in the pursuit of customer satisfaction and a healthier, more beautiful world.

REIKO TAKIGUCHI, DIRECTOR & PRESIDENT OF ARSOA KEIO GROUP CO., LTD.
REIKO TAKIGUCHI | DIRECTOR & PRESIDENT OF ARSOA KEIO GROUP CO., LTD.

Over the last few decades, the Japanese cosmetic industry has suffered from regional manufacturers providing cosmetics at a very low cost. Nevertheless, Japan remains a leader in highly functional and specialized chemicals such as cosmetic additives or fragrances. Japanese firms are some of the world leaders in the cosmetic field, with companies like Shiseido or Kao Chemicals. What would you define as the strengths and weaknesses of the Japanese cosmetics industry in general?

The greatest strength shared by all Japanese companies in the chemical and beauty industries is their unwavering commitment to quality and safety. This dedication takes precedence in every product they produce, adhering to strict chemical regulations, even for chemical-related raw materials. Japanese cosmetic enterprises are renowned for their high-quality standards and steadfast adherence to rigorous regulations. Within this industry, there is a strong emphasis on ensuring product safety, which involves subjecting cosmetic products to extensive testing and maintaining stringent quality control measures. This commitment results in the release of high-quality products.

In addition, Japanese customers are known for their specific and intricate requirements. To meet these demands, Japanese companies continuously strive to implement best practices and enhance their research and development efforts to prove that they are the best in delivering products that cater to the diverse skin variations in Japan.

An additional advantage that Japanese companies boast is their strong research and development capabilities. They consistently work toward creating new and improved cosmetic ingredients and formulations.

 

The COVID-19 pandemic greatly impacted the beauty sector. For example, all the makeup shelves at Ginza were completely empty for almost two years. On the other hand, e-commerce sales skyrocketed and provided many opportunities for firms like yours to develop an online-based media connection with clients. Recent Facebook data in the US mentioned that about 44% of cosmetics customers choose their cosmetics depending on the recommendation of friends, acquaintances, or colleagues on social networks. In this digital era, there are a lot of young users, especially millennials. How do you ensure your brand remains relevant, and how do you connect with your audience about the quality of your products?

Effective communication plays a vital role in bridging the gap between our cosmetic brand manufacturing company and our valued users. We have two primary avenues for reaching our customers: traditional retail shops as the brick-and-mortar approach and online stores (available in the US only). Regardless of the channel we utilize, our commitment remains unwavering: we always aim to connect with our end users.

Nonetheless, the outbreak of the Coronavirus pandemic, our focus has been primarily on retail shops, where we rely on face-to-face interactions to introduce our products to salons. This approach has been a cornerstone of our business strategy. We believe that those coming to the salons should not only understand the chemical components and raw materials that go into our products but also gain a deep understanding of how our products are used and become a part of their everyday lives after their purchase.

With the advent of the pandemic, we've observed a significant surge in online sales. This shift has emphasized the importance of educating our customers about our products, addressing their specific skincare concerns and presenting our solutions. In this way, we strive to serve as the vital link between our role as a manufacturer and the end users. We are consistently prepared to meet our customers' needs, offering comprehensive product information they expect as part of their purchase experience.

Our goal is to provide informative content that caters to our customers' inquiries. Digital communication has brought about numerous positive outcomes, particularly in terms of education for our salespersons, beauty counselors. However, we've encountered challenges in keeping our promises to our customers through online channels. As a survey shows, it has become evident that repeat customers tend to avoid online purchases. While they may make a purchase, it may not always meet their expectations, potentially causing them to drop as clients. To prevent this situation, we have placed a stronger emphasis on our traditional methods of selling products through retail shops and introducing our offerings to beauty salons. Our aim is to ensure that customers are thoroughly satisfied when making a final purchase. Simultaneously, we strive to attain a higher ratio of repeat customers and strengthen their attachment to the products we release. While we use both methods, we still favor the face-to-face promotion of our products in retail shops.

 

Japan has an aging population, and it’s expected to drop below 100 million people by 2050. This ultimately drags the domestic market to shrink slowly but surely. Axxzia's president mentioned and emphasized the popularity of Japanese cosmetic products in the Chinese market to expand their business. As a beauty company, moving forward, which other countries or regions do you feel the need to diversify your products to ensure long-term business success?

Traditionally, Japanese companies, including ours, have primarily focused on serving the domestic market and prioritizing Japanese consumers. As a result, many of our products are custom-tailored to meet the specific needs of the domestic audience. However, Japanese companies often encounter challenges in introducing and promoting these same products to a global audience. Even if these products have a strong track record in Japan, there's no guarantee that they will be embraced and received in the same way in foreign markets.

Our strategic focus now extends to foreign markets, particularly in regions with an appreciation for Japanese beauty, Made-in-Japan brands, the quality of raw materials used in our products and the benefits of using Japanese beauty products. We are looking to target Southeast Asian countries that are geographically close to us and share an understanding of the appeal of Japanese products.

In regions like the United States and Europe, we must do more than introduce our final products. We recognize the need to complement our strategy with an educational component. Many individuals worldwide are showing a growing interest in adopting a healthier lifestyle. The global awareness of this trend is on the rise, and Japan has much to offer beyond supplements and beauty or cosmetic products. We can share our rich cultural heritage, including Japanese washoku or cuisine and various aspects of our culture. Our aim is to spread this knowledge alongside our products in foreign countries. Furthermore, we want to emphasize the beauty of Japan, both inside and out. By effectively conveying this message to our clients, we can better understand and communicate with foreign markets, enabling us to develop a broader range of products than we currently offer.

We want to introduce products beyond cosmetics, food products, supplements or makeup. Situated in Yamanashi, a region graced with breathtaking natural beauty, we have much more to offer beyond our product portfolio. We seek to position our company as an ambassador that showcases various facets of Japanese life—a central concept of Arsoa.

At our local facility, we cultivate plants, vegetables and crops like those found in nearby prefectures, employing pesticide and chemical-free methods to ensure their utmost naturalness for healthy living and lifestyle.

We are trying to do more than the typical pursuit of any business related to J-beauty, which primarily focuses on developing excellent products. Our goal includes introducing a healthy lifestyle along with our products. Most people come here for the experience.

Health issues are prevalent not only in Japan but around the world, including conditions like high blood pressure, obesity and diabetes, often stemming from poor lifestyle choices. Leveraging the exceptional natural surroundings of our location, we are dedicated to advocating healthy living and longevity. This mission is extended to our employees, visitors, partners and anyone who comes to Yamanashi to see us. It represents the added value that our production site brings. Our devotion to promoting a healthier lifestyle extends throughout the entire life cycle of both our customers and our company.

 

Your standard product is a skincare pack, which aligns washing with products like the Queen Silver soap, keeps solutions like your clay pack, lotions, essences and solutions for full coverage to keep your clients’ skins refreshed and in good health. In the K-cosmetic industry, they tend to multiply the amount of products used in order to keep the skin fresh. On the other hand, Japanese cosmetic manufacturers try to align everything into one in order to avoid using too many products at once. How are your skincare products, in general, superior to the most conventional ones you can find on the market?

Our flagship product is our originally developed ARSOA Queen Silver Soap. This exceptional soap, enriched with naturally sourced minerals and charcoal, is the result of an intricate 70-day production process, marked by the meticulous selection of minerals it incorporates. Introduced 51 years ago, it was designed with the understanding that washing is an integral step in skincare, before the application of lotions, essences or makeup. Our soap has consistently delivered remarkable results and has made the most of the natural power of one’s skin.

Our soap is rooted in our founder’s strong determination to give a solution to women who suffer from skin problems. To have healthy skin makes women’s heart fulfilled and makes her happy. We believe it will never change.

We take immense pride in this flagship product, which has been an integral part of our company's journey throughout its existence.



Our clay pack is designed to effectively absorb dead skin cells and dirt. The clay consists of very rich ingredients and minerals, specifically magnesium which defines the product's essence. Sourced from Hokkaido, where it has been naturally preserved for decades or even centuries, this clay retains its pristine quality, untouched by oxidation. We take great care when extracting it for use in our products, and it remains one of our distinguishing products in our lineup.

Due to its fine particle composition, the clay easily adheres to the skin. Clay naturally forms distinct layers as it slides down the mountain slope, and we extract it in its pure, naturally preserved state. We place a strong emphasis on using naturally derived ingredients in all our skincare products. Adding water enhances the efficacy of our products, and the choice of water used in the production process is of utmost importance. To maintain the integrity of our natural products, we carefully consider the water used in the development of our products.

In the manufacturing of cosmetics, we go beyond the selection of raw materials to carefully consider the water used in our production processes. We use the underground water sourced from our factory in Saku, Nagano, which undergoes purification through ceramic filtration. This process retains the essential minerals needed to produce superior products. While it may seem simple, this approach is quite complex. By selecting and enriching the water we use, we can provide the ultimate solution for all skin types, catering to individual needs for lotions, moisturizers and essences. The selection of water at our production sites is a fundamental step, as it serves as an important raw material with moisturizing properties that ultimately enhance the features and functionality of our products.

We also use water sourced from the Tokachigawa Hot Spring in Hokkaido. In this case, we utilize the water as it is, as it already contains various minerals and humic substances essential for lotions or moisturizing products. Our intervention in the water purification process is minimal, primarily focused on removing impurities because the water is already naturally enriched.

Our entire product lineup is grounded in the concept of harnessing exquisite natural raw materials from different regions of Japan to create high-quality products.

 

You also manufacture water purifiers such as the Cochamama Series, which is a bathroom water purifier for skin and hair that has 0.3mm holes to create a shower with a smooth, silky touch on your skin. It can also create bubbles that vary in size from one nanometer, about 1/300th the size of a pore, to even smaller bubbles, to about 100 nanometers. How do you go from making cosmetics to this monozukuri product?

We ventured into the realm of water purifiers out of the necessity to refine water quality and create water solutions for our products. Our strategy revolves around emphasizing water purifiers as part of our holistic wellness commitment, representing our initial foray into this business segment.

Clean and purified water goes beyond the benefits it offers to our bodies; it also positively impacts the health of our skin and hair when used for washing and bathing. In the initial stages, we introduced the first generation of water purifiers as a complementary product for tap or drinking water, focusing on eliminating water impurities. Subsequently, we further innovated to enrich water by infusing it with various minerals and naturally derived elements. Our development of the next-generation water purifiers targets to expand the utility of water for consumption and personal care, aligning with a broader aspiration for a healthier lifestyle.

Recognizing water's vital role in sustaining life, we are committed to incorporating it into our products and highlighting its significance in our daily routines. Furthermore, in our pursuit of excellence, we've not only adhered to government standards and regulations for purifiers but have also gone the extra mile in developing our purifying system, drawing upon our experience in the cosmetics industry.

We've also developed a patented technology in-house, a purifier that utilizes natural filters with multiple soil layers. As a result, we proudly stand as Japan's best water purifier manufacturer.

Our purifying system goes beyond regulatory standards such as JIS or JWPAS, effectively detecting and eliminating substances like PFOS or PFOA that typical purifiers may not remove before JIS or JWPAS set the regulation for those substances. This proactive approach exceeds the Japanese national purification standards, setting us apart in the market. We've introduced one-of-a-kind purifiers that address these specific challenges, underscoring our dedication to delivering comprehensive, high-quality solutions for our customers' well-being.

Our company's history is rooted in the release of exceptional skincare products, soaps and naturally purified water-based items. We understand the importance of water in product manufacturing and our daily lives.

Furthermore, we actively engage in anticipating and analyzing the issues that our customers are currently facing or may encounter in the future, including concerns related to aging or allergies.

 

Traditional makeup often leads to common skin issues among women, including clogged pores, premature aging and imbalances such as overly dry or oily skin. You have a different approach, and your Livest Base Makeup treats makeup as a part of the skincare routine. How do you ensure the health of your client’s skin with your makeup products?

To ensure the health of our clients' skin, we strive to attain the best possible standards of safety and reliability in the makeup products we manufacture. We work hard to understand the essential and unique problems of our clients with different skin types, catering to both male and female users.

In our R&D, we analyze the effects of aging, dryness, oiliness, and UV rays on the skin. We are in the process of establishing a data analysis system to determine the most effective materials and the optimal ingredient combinations that cater to the specific needs and preferences of our daily product users. We study the requests of our customers to create innovative solutions that promote the health of their skin. Makeup is more than just enhancing one’s beauty. It is an integral part of skincare. We endeavor to embed functional elements into our makeup products to ensure they are compatible with all skin types. Skincare products should go beyond aesthetics to genuinely care for the skin's health.

 

The cosmetic industry has historically been targeted toward female consumers, but male beauty is slowly but surely growing. In the United States, approximately 15% of men currently use cosmetics, and it is projected that about 17% are contemplating using them in the near future. Particularly among the younger male demographic, there is an increasing openness to using makeup items like mascara or foundation. As the male cosmetic market continues to grow, what other opportunities do you see for your company, and do you plan on creating products tailored for this market?

As for makeup, we haven't reached that stage yet. We already have a range of products for male users, including skin lotions, soaps, and cleansing solutions. These products are suitable for both men and women and cater to a unisex audience.

 

In 2021, AOB Keio Group, Arsoa Honsha, and Biokura Shokuyo Honsha merged and changed their trade name to Arsoa Keio Group Co., Ltd. What synergies has this merger brought to your company? Are you looking to acquire more firms in the future, especially from overseas?

Before the merger, each of the three companies had a distinct focus, be it skincare, makeup, haircare, or health food products. The merger brought us together, allowing us to pool our resources and transition toward conveying the essence of our philosophy as a cosmetic company that emphasizes the harmony between people and nature. Our vision has expanded beyond cosmetics and makeup; now, we aspire to promote a better lifestyle and raise awareness about factors such as nutrition, sleep, and fitness. This fundamental idea underpins the core of our company's existence. While we have confidence in our products, we recognize that being a company solely focused on product releases is no longer sufficient.

Our direction now involves developing holistic solutions for individuals who seek to relish the joys of nature, engaging in activities like yoga and consuming wholesome food throughout the day. This innovative approach may ultimately render makeup and cosmetic products unnecessary. Our pivot in this direction is essential because we want to offer our customers more than just products; we are dedicated to providing added value and supplementary services, striving to deliver comprehensive solutions for the total satisfaction of our customers.

Our goal and passion have always revolved around adding value to our products. Looking forward, we aim to extend this value beyond the realm of skin, hair, and lifestyle, delving into the discovery of inner beauty within one's heart and soul. We want to continue supporting our customers in every facet of their lives and ensuring they can experience genuine satisfaction by doing things the right way.

 

What role does partnership play in your business model, and are you actively searching for new partnerships for your international expansion?

We are continually seeking potential partners to collaborate with to enhance our understanding of markets beyond Japan. It is advantageous to work with companies that possess a deep understanding of local market needs and have substantial experience in other fields overseas. We are looking forward to successfully doing so in the near future.

 

Do you have a specific location in mind to continue your international expansion?

At this moment, we don't have a specific location in mind for expansion. Our plan is to potentially expand our business in about a year from now, as our primary focus currently is strengthening our brand awareness in foreign countries.

To some extent, the Southeast Asian market already understands the concept of J-Beauty, not just our products but the overall beauty of Japanese cosmetic products. When our brand awareness reaches a level higher than our current status, we will then consider specific strategies for entering foreign markets. For the time being, we try to take things very slowly.

 

If we were to interview you again on the last day of your presidency, do you have a personal goal or ambition that you'd like to have achieved by that date?

My vision is to share the magic of our ingredients, products, and the water we use in every step of our production process with everyone, whether from Japan or beyond, who visits our company in Yamanashi prefecture. As the president of this company, I am dedicated to ensuring that all our endeavors result in the happiness of our customers and all those we collaborate with.

At some point, our focus will extend beyond 'mono,' which represents products or things and encompass 'koto,' signifying action, activity, or attitude. This is a vital message that we aim to convey to all who come to visit us. Although Yamanashi is quite far, people who make the time to come can be inspired to reflect on their lives, goals, and future. Surrounded by the breathtaking natural beauty of our location, visitors can clear their minds and gain a fresh perspective through the great products we offer and the way of life we promote.

One can achieve so much more by setting priorities and life goals in the right direction. To the extent that we can assist customers who make the journey to Yamanashi in realizing this, we will be delighted to offer our support and be a part of their personal growth.

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